Discuss the logit and probit programs

Assignment Help Engineering Mathematics

Reference no: EM131530084

Question: What would be your answer to the following queries?

(a) My regression program refuses to estimate four seasonal coefficients when I enter the quarterly data including a zero-one dummy for each quarter. What am I supposed to do?

(b) I estimated a model with a zero-one dependent variable using the logit and probit programs. The coefficients I got from the probit program were all smaller than the corresponding coefficients estimated by the logit program. Is there something wrong with my programs?

(c) I have data on medical expenditures on a sample of individuals. Some of them, who did not have any ailments, or did not bother to go to the doctor even if they had ailments, had no expenditures. I wish to estimate the income elasticity of medical expenditures. I am thinking of dropping the individuals with zero expenditures and estimating the model by OLS. My friend says that I would be overestimating the income elasticity by doing this. Is she correct?

Reference no: EM131530084

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